Economist Steven Horwitz has a fascinating post on the history behind the Schechter Poultry case, the 1935 Supreme Court decision that struck down the National Industrial Recovery Act - the most extensive attempt at economic central planning in American history. As I explained in this post, the NIRA established production codes, price controls, and wage controls for nearly the entire nonagricultural economy, in effect establishing a government-enforced cartel for every industry. The NIRA and related New Deal statutes greatly increased unemployment and may have prolonged the Depression by up to seven years. Unlike most of the other controversial Depression-era Supreme Court decisions, which split the justices along ideological lines, Schechter was unanimous. Even liberal justices like Louis Brandeis recognized that Congress had exceeded its authority under Article I of the Constitution and voted to strike NIRA down.

This much I already knew from the research I did for my article on constitutional change in the 1930s. What I did not realize until I read Horwitz's piece is that the Schechter brothers ran afoul of NIRA in large part because their butcher shops followed the Jewish laws of Kashrut. Some of the food preparation practices required by Jewish law violated NIRA regulations; ironically, Horwitz notes, the deviations from Kashrut imposed by the government reduced the quality of the Schechters' product and imposed additional health risks on their customers. As Horwitz also points out, the prosecution of the Schechters and the press coverage thereof had a significant anti-Semitic component. Anti-Semitism was, of course, common in pre-World War II America and was probably exacerbated by the Depression, when many blamed the economic crisis on the supposed machinations of Jewish industrialists and financiers. Horwitz writes that "[c]overage of the case . . . was highly tinged with the standard anti-Semitism of the time, especially because the Schechters were right out of Jewish central casting, being immigrants with their Eastern European cadences and traditional Jewish dress. It was the Jewish rubes of Brooklyn against the high powered WASP lawyers of the northeast corridor." Fortunately, it was the rubes who prevailed in the Supreme Court.

UPDATE: Historian Eric Rauchway criticizes Horwitz's post here. Horwitz has a compelling response. If anything, the Rauchway post makes the NIRA poultry regulations seem even more repellent, by noting that the people who wrote them were union bosses who had previously used violence to try to drive the Schechters and other competitors out of business. This post relied on by Rauchway for most of his argument is also wrong to suggest that the Court's decision in Schechter was driven by anti-union animus. The opinion was written by moderate Republican Chief Justice Charles Evans Hughes, who had supported pro-union legislation during his term as Governor of New York in the early 1900s. It was also joined by pro-union liberal justices such as Brandeis.

UPDATE #2: Historian, Andrew Cohen, author of the post relied on by Rauchway for much of his evidence writes to point out that he did not mean to suggest that the Schechter decision was based on generalized hostility to unions, but on the justices' distaste for the violent tactics of the particular unionists who wrote the poultry regulations. Fair enough. Even this narrower claim is suspect, however, since the justices surely realized that their decision would have the effect of invalidating the NIRA as a whole, not just in cases where the regulations were written by especially violent unionists. Thus, it is unlikely that their decision was based primarily on the characteristics of these specific unions.

Just in time for Admin Law review here at the dark end of the semester. Excellent.

The pre-WWII context is particularly apt for another reason: the Enabling Act had passed in Germany only two years prior. Given the timing, I find it fitting that some Jewish immigrants got the Supreme Court to strike down the delegation of great power from the legislature to the executive.

related New Deal statutes ... may have prolonged the Depression by up to seven years. Compared to what? The fascist government that would have taken over had New Deal policies not been implemented?

Even an ardent New Dealer like Brad deLong admits that FDR made mistakes. After all, he lacked our perspective. But the alternative was not some libertarian paradise where people would rather starve than demand assistance from the government. Fascism was a real possibility.

The late, great Frank O'Connell, of the Olin Foundation and National Review, worked on the Schechter case as a young labor lawyer. Mentioning Schechter in his presence was good for at least a half hour of lively tales from the New Deal. He was quite emphatic about the fact that "Schechter has NEVER BEEN OVERRULED."

If you want your economic plans to work, you need a "planned economy". If you want your planned economy to work, you need a "planned society". Unfortunately for planners, experience across the world shows that people really don't like planned societies, and planned economies therefore don't work very well.

The New Deal probably did extend and worsen the Depression as discussed here

The New Deal was dangerously close to fascism — FDR's economic policy prescriptions were not very different from Mussolini or Hitler. Had his court-packing plan gone ahead, the US would have become something like a fascist dictatorship, with top-down controlled economy.

"The Forgotten Man" and "Liberal Fascism" are both worth reading. The Forgotten Man's discussion of the Schechter case is what prompted Horwitz's post.

One more fact about Schechter Poultry which I shared with my (Jewish) Admin law professor and he told me he would include it in the course next year.

A member of the Schechter fammily has told me that shortly after the ruling Schechter Poultry went bankrupt. The family claims that the Jews of New York found out that the Schechters has run afoul of their beloved President Roosevelt and therefore stopped giving their business to the company.

It's rather like saying that a particular anecdote about John Dillinger in a rainstorm illustrates how umbrellas keep gangsters dry.

Limits on government power can protect unpopular minority groups, and they can endanger unpopular minority groups. There's nothing about limitation on power that tends essentially in one direction or the other.

How far back does the Chasidic tradition of dark suits and fedoras date? Just curious. Thanks.

The Chassidic movement began in the late 18th century. According to the Wikipedia article, Chasidic dress became set during the late 19th Century or somewhat thereafter:

The Tsarist edict of the mid 19th century banning Jewish clothing mentions the "Jewish kaftan" and the "Jewish hat" and as a result of this edict Hasidim modified their dress in the Russian Empire and generally hid their sidelocks. Modern Chabad Lubavitch wear the Prince Albert frock coat substitutes for the bekishe reflecting this change, as does the Ger substitution of the spodik for the shtreimel.

Hasidic dress did change over the last hundred years and become more European in response to the Emancipation Movement. Modern Hasidim tend to wear Hasidic dress as worn just prior to World War II. Numerous pictures of Hasidim in the mid 19th century show a far more Levantine outfit (ie a kaftan lacking lapels or buttons) that differs little from the classical oriental outfit consisting of the kaftan, white undershirt, sash, knee-breeches (halbe-hoyzn), white socks and slippers.

The New Deal was dangerously close to fascism — FDR's economic policy prescriptions were not very different from Mussolini or Hitler.

Good lord. I'm not competent to address the Mussolini comparison, but the Hitler one is just silly.

Is that what one reads in Jonah Goldberg's magnum opus?

Pages 272-73 of Piers Brendon's The Dark Valley are a judicious, readable comparison and contrast of FDR to Stalin and Hitler. Short version: the notion that FDR was a dictator "reveals much about the power of ideas to transcend reality."

Grackle, interesting perspective, especially in exposing that the standards violating kashrus were written by Schechter's competitors in the kosher meat business.

I have read that before WWII, the kosher meat business in much of the US was controlled by people who did not believe in kashrus and saw the industry as simply a way to make a buck. Who cared if the consumer ended up with tref (non-kosher) meat that they thought was kosher? The crooks used violence and threats to intimidate the rabbis and the handful of honest butchers who actually cared whether or not meat was kosher. This seems to be what the Schechter Brothers were up against.

Little surprise then that the hoodlums who vandalized Schechter's trucks wrote regulations saying the butcher had to sell meat whether it was kosher or not, and that the consumers had to buy it.

By the way, is it a coincidence that the brothers were named Shechter?

No one is suggesting that FDR was a dictator. But if --<i>if</i>-- his court-packing plan had gone ahead he would have destroyed our independent judiciary. Given a pliant Congress and his personal popularity there's little he couldn't have done.

I cannot take seriously anyone who repeats the absurd contention that FDR extended the Depression by 7 years.

He took office in March 1993. Seven years from then was March 1940.

Apparently Professor Somin and Amity Shlaes and a host of other poohbahs know a secret method by which FDR could have ended the Great Depression and righted everything by about, oh, say, May 1933. I'd love to hear what he should have done.

That's the kind of clear, declarative sentence social science makes, and I like to take and assume is totally true!

Yeah, I demolished it in the previous thread. Turns out that Ilya's proof was quoting a couple of other conservatives and libertarians who asserted it baldly in their own papers without any real evidence for it.

But it's a typical conservative talking point. The point isn't for it to be true (it isn't) but to give conservatives something to repeat to their followers. Eventually, you'll have 20 or 30 million Americans who have no idea what the basis for the claim is just walking around and believing it, and of course, that will help the conservative cause whenever someone proposes liberal programs to alleviate economic problems.

Leaving that aside, what in the historical record suggests that FDR desired to jail his opponents, close down dissenting press organs, or do any of the things which would lend some shred of credibility to your notions?

Leaving *that* aside, the Court-packing plan would not have "destroyed our independent judiciary." It allowed FDR to appoint additional justices and judges when sitting jurists reached a certain age but did not retire. This would've created lots of FDR appointees, but once appointed they would've served for life and not been subject to his control. It was a bad plan, but not a step towards dictatorship.

Leaving *that* aside, the Court-packing plan would not have "destroyed our independent judiciary." It allowed FDR to appoint additional justices and judges when sitting jurists reached a certain age but did not retire. This would've created lots of FDR appointees, but once appointed they would've served for life and not been subject to his control. It was a bad plan, but not a step towards dictatorship.

Wouldn't it be more accurate to say that it was a step towards dictatorship, but that there was a long way to go?

You describe it rather cavalierly. Somehow I think if Bush had proposed -- in response to a 5-4 vote against one of his detainee treatment policies -- that if any justice over 80 years old refused to retire, that Bush be allowed to appoint another justice who could nullify that justice's vote, the reaction would not be quite so calm.

FDR's plan didn't just expand the court, after all; it allowed FDR to do so at his discretion if he didn't like a particular justice. Also, of course, it was written specifically to give him six new appointments at once.

You describe it rather cavalierly. Somehow I think if Bush had proposed -- in response to a 5-4 vote against one of his detainee treatment policies -- that if any justice over 80 years old refused to retire, that Bush be allowed to appoint another justice who could nullify that justice's vote, the reaction would not be quite so calm.

What was "calm" about reaction to FDR's plan?

I wrote above that it was a bad plan.

But yes, packing the Court to torture &abuse prisoners, vs. packing the Court to try out one's economic theories, are in different categories. Life and liberty come before property for a reason.

The main point, of course, is simply that it's ignorant to see anything fascist or dictatorial about FDR's policies. He was not a perfect president and I'm happy to discuss his faults, but those faults fell within the scope of the American system of government ... as opposed to, say, Nixon's.

I remember distinctly my dear old grandmother, who died over twenty years ago, telling me that she voted against FDR for his last term in office because he was turning into a dictator. It must have been clear to a lot of people, seeing as the constitutional presidential term limit was enacted soon after.

... FDR shouldn't have been re-elected in 1944, and it was poor of him to conceal his health issues from the public. But the notion that he was a "dictator" or becoming one remains silly. It was constitutional to run repeatedly; he governed constitutionally when elected.

I think the 2-terms limit was obviously a reaction to FDR, but it doesn't bespeak "dictatorship" so much as the parties' mutual fear of being shut out of the White House for 3 or 4 terms like the GOP was under FDR. Bill Clinton could've won in 2000 had he been eligible to run.

I don't think there's any doubt that Samual Adams & Co. would have seen the New Deal as dictatorial. The government began to invade all sorts of spheres that would not have been considered the proper role of government; the Schecter case illustrates this perfectly. The micromanagement of a small business's intrastate dealings with its customers was well beyond anything envisioned by the founders.

As Jefferson might have put it, FDR "sent hither swarms of officers to harass our people, and eat out their substance." That this was done in a manner which infringed on religious freedom only added insult to the injury. And all of these regulations were enacted by unelected bureacrats rather than the democratic process. One can almost hear the Anti-Federalists saying "I told you so."

So I think NIRA was clearly dictatorial. Not as dictatorial as Hitler, but dictatorial nonetheless.

As for fascism, too many people think fascism was primarily about invading Poland and the Holocaust. At its heart, it was an economic agenda. Certain parts of the New Deal, most obviously NIRA, were fascistic and in fact consciously modelled on what Italy and Germany were doing at the time.

Whether that means that overall FDR was fascist is debatable. I tend to think that he saw himself as saving the free market/democracy in a time of crisis, but that unfortunatley he was an economic ignoramus who didn't know what he was doing.

So I think NIRA was clearly dictatorial. Not as dictatorial as Hitler, but dictatorial nonetheless.

I don't quite see how a program enacted by Congress is "dictatorial."

At its heart, it was an economic agenda.

Well, here we have to ask "which fascism?" Nazism was racist at its core -- economics was never Hitler's strong suit or particular interest. Naturally, Hitler pushed the economic angle to win elections and to rally support, but it was the freakin' Depression -- of course he did.

War and anti-semitism were however his central goals, not any economic agenda.

You're confusing Nazism, which was a particular type of facism, with fascism generally. No one is saying the New Deal was Nazism, they're saying it had fascist tendencies. Mussolini wasn't anti-semitic.

For what its worth, Eight of the 25 points of the Nazi Party Platform dealt directly with economic issues such as health care, land reform, etc. A few more dealt with them indirectly. These were central to the Nazi agenda.

Eight of the 25 points of the Nazi Party Platform dealt directly with economic issues such as health care, land reform, etc. A few more dealt with them indirectly. These were central to the Nazi agenda.

Good heavens. Do you think Hitler could've recited the platform at gunpoint?

I can't imagine why "conquering Europe" and "exterminating the Jewish pest" were omitted.

Land reform *was* dear to the Nazis, due to the quaint notion that the industrial powerhouse of Europe ought really to be a bucolic paradise ... but IIRC, the main vehicle of this "land reform" was supposed to be conquering the Ukraine and divvying it up into farms.

(Mark Mazower's Hitler's Empire is the latest book I've seen on this, and while it doesn't pack much of an argument, it's fascinating for its details. You'll note I'm a consumer of pop history for the most part.)

... as for "fascist tendencies," well, I'm still puzzled what those are. Can you be a little bit fascist?

Limits on government power can protect unpopular minority groups, and they can endanger unpopular minority groups. There's nothing about limitation on power that tends essentially in one direction or the other.

I think the point is much more systematic than that. Government (in a democracy, at least) will tend to be dominated by political majorities. Groups that are unpopular with them are likely to get the short end of the political stick. Thus, they tend to benefit from limits on government power. Similarly, they tend to benefit from economic liberties, which give them a secure space and enable them to do business with members of the public who are willing to transact with them, even if others disapprove.

"But the notion that he was a "dictator" or becoming one remains silly."

It was certainly not silly to the people who lived at that time. My grandmother was poor her entire life and had lots to gain from FDR and his new deal, and yet, she felt affected enough by him to have told her grandchild about it more than thirty-five years later. I wouldn't brush off what people thought who actually lived through that time.

Railroad Gin sez: 'consciously modelled on what Italy and Germany were doing at the time.'

Right, the New Deal was consciously simultaneously modeling Mussolini's 'War for wheat' to increase wheat output and make America an autarky, and setting up a dictatorial policy to curb the output of wheat (and, in the context of this post, chickens).

It was just coincidence then that Rex Tugwell met with Mussolini. It was just a coincidence that Mussolini expressed his admiration for what FDR was doing. It was just a coincidence that FDR said they were doing what Mussolini was doing, just in a more politically orderly way. All just coincidences.

I suggest you read Luigi Villari's "The Economics of Fascism" for a better understanding of the institutional infrastructure of the system and the assumptions behind it, which were much like the sort of government-business-labor cooperative corporatism exemplified by the NRA. And if you've ever seen the NRA's propaganda films, you'll understand even more.

People recognized this at the time as have later scholars. Calling aspects of the New Deal fascist is NOT, repeat NOT, to say FDR was a dictator. It is to say that the institutional elements of the New Deal borrowed, in many cases consciously, from the Italians.

Apparently Professor Somin and Amity Shlaes and a host of other poohbahs know a secret method by which FDR could have ended the Great Depression and righted everything by about, oh, say, May 1933. I'd love to hear what he should have done.

When you hear someone complain about a medical malpractice case, do you demand to know what the doctor should have done to ensure that the patient was perfectly healthy for the rest of his life?

It was just coincidence then that Rex Tugwell met with Mussolini. It was just a coincidence that Mussolini expressed his admiration for what FDR was doing. It was just a coincidence that FDR said they were doing what Mussolini was doing, just in a more politically orderly way. All just coincidences.

um, what stopped the court packing plan was pretty complex and did not involve congress rejecting the plan. just weeks after Roosevelt proposed the measure to congress, Justice Roberts changed what would be a typical vote and joined a majority that upheld Washington's minimum wage law in West Coast Hotel Co. v. Parrish. Then two things happened. Justice VanDevanter retired (one of the four horsemen) and the senate majority leader (can't remember his name), who was one of the bill's essential supporters, died suddenly, causing the senate to rethink the bill and re-send it back to committee.

soon after that, Justice Black was appointed, Justice Sutherland retired (replaced by Justice Reed), and the whole need for the court packing plan simply went away.

I guess what I'm saying is that different circumstances may have produced different results. the stories I've heard - granted, just speculation - involving the senate majority leader (I looked it up, his name was Robinson) suggested he could get the measure passed at least in the senate because of "owed favors". I do not deny that congress probably would have rejected the plan if it ever made it to the floor for a vote (certainly the House probably would), but as it was only the senate addressed it, so we can't say for sure. and it didn't take long for the whole plan to be moot anyway.

by 1941, Roosevelt had replaced 7 of the 9 justices. He got to pack the court regardless.

Right, the New Deal was consciously simultaneously modeling Mussolini's 'War for wheat' to increase wheat output and make America an autarky, and setting up a dictatorial policy to curb the output of wheat (and, in the context of this post, chickens).

The question is what is any government doing micromanaging this? If one Soviet Five Year plan called for more wheat and another called for less wheat would that mean the USSR was no longer communist? This is a distinction without a difference.

And Steven Horwitz is right about those propaganda movies. They have some on YouTube. Straight out of Triumph of the Will.

Joseph Robinson actually keeled over dead in the midst of the controversy, which on top of everything else left FDR with no hope.

Kennedy notes that FDR's critics blamed the president for Robinson's death, the theory being that the stress over the plan had done for Robinson.

The question is what is any government doing micromanaging this?

That makes sense to us, but misses the gloomy doubts of the 1930s, when it was by no means self-evident that capitalism was not "the light that failed." Deflation led prices to drop to points where farmers were destroying their produce rather than send it to cities where hungry unemployed were lining up at soup kitchens. It should not surprise us that many people thought there was something wrong with the system.

That's the context of Keynes's statement that what the world economy had was alternator trouble -- the car needed to be tinkered with, not junked altogether.

The Agricultural Adjustment Act (Pub.L. 73-10, enacted May 12, 1933) restricted production during the New Deal by paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops, thereby giving farmers relative stability again. The farmers were paid subsidies by the federal government for leaving some of their fields unused. The Act created a new agency, the Agricultural Adjustment Administration, to oversee the distribution of the subsidies. It is considered the first modern U.S. farm bill.

Agricultural Adjustment Administration
By the time the Agricultural Adjustment Administration began its operations, the agricultural season for many crops was already under way. The agency oversaw a large-scale destruction of existing cotton crops and livestock in an attempt to reduce surpluses. No other crops or animals were affected in 1933, but six million piglets and 220,000 pregnant cows were slaughtered in the AAA's effort to raise prices. Many cotton farmers plowed under a quarter of their crop in accordance with the AAA's plans.

The AAA is common knowledge -- don't we still pay farmers not to grow certain crops?

My example was simply to show why gov't intervention was seen as necessary. "Letting the free market sort itself out" was not a politically viable solution; I'm not sure that there was even an economic consensus to that effect.

I'm wondering just how informal, private-sector, and otherwise freely-contracted arrangements in NY's Jewish butchering community were, considering that NY had kosher fraud laws requiring official inspections and criminal penalties from 1915 to 2002.

Silly comparisons to Fascists and Nazis lead the lay reader to suspect that the comparers don't have any valid criticisms of the New Deal. When was the New Deal Exception to Godwin's Law enacted?

Well "silly" begs the question now doesn't it? I gave you actual evidence of the similarities and pointed you to a description of Italian fascism by an Italian fascist to support my claim. The point about Godwin's law is that the comparisons are irrelevant to the argument at hand and made without evidence. I provided some. So your little rule isn't applicable.

Furthermore, I did NOT call FDR a fascist. I said the NRA had strong similarities to the institutions of Italian fascism. If making such a claim is out of bounds by Godwin's Law, then I guess comparative historical social science can go out the window too, eh?

How about I coin Horwitz's Corollary to Godwin's Law: When people invoke Godwin's Law in the face of a serious relevant argument made with evidence and citations, it probably reflects their own inability to address the claim being made.

"But it's a typical conservative talking point. The point isn't for it to be true (it isn't) but to give conservatives something to repeat to their followers. Eventually, you'll have 20 or 30 million Americans who have no idea what the basis for the claim is just walking around and believing it, and of course, that will help the conservative cause whenever someone proposes liberal programs to alleviate economic problems."

It's not just conservatives. The "New" Deal is now going on 80 years old. We (including us liberals) should have come up with something better by now. FDR the great experimenter sure would have.

... FDR shouldn't have been re-elected in 1944, and it was poor of him to conceal his health issues from the public. But the notion that he was a "dictator" or becoming one remains silly. It was constitutional to run repeatedly; he governed constitutionally when elected.

Since when does legality delimit dictatorship? It's common for various third-world thugs to get themselves elected and then change their constitutions to allow themselves to keep running for office. I'm not saying that FDR was a dictator, but the mere fact that his actions were de jure legal doesn't mean he wasn't.

And the Supreme Court didn't seem to think he was "governing constitutionally," which was precisely why he wanted to pack the Court.

And similarly:

I don't quite see how a program enacted by Congress is "dictatorial."

Again, why not? Dictators often have the support of their legislatures. Dictatorial refers to the relationship between the government and the people, not the relationship between different parts of the government.

Oh, and as for your life/liberty/property thing, even if I agreed with your analysis, let's not forget the internment camps.

So far as I've seen, the only similarity between Italian corporatism and the New Deal is that Italians and Americans both ate a lot of wheat.

I'm still waiting to hear about that magic solution that would have ended the Depression in a matter of weeks. I mean, without extending its end to 1943, which in the real, sane world -- as opposed to UCLA -- was 1, 2 years past the time that employers were demanding, in wartime, that the Army release workers so they could continue to operate.

The Great Depression did not end at the start of WWII. It ended at the conclusion of WWII. If you define a depression solely by the level of unemployment, then it did indeed end with the start of the war. But that unemployment ended by drafting unemployed males! That is hardly the same thing as an economic recovery. Gearing up factories to produce tanks and shells and other non-market production did not turn the economy around, it only delayed the return to market production. The idea that wars are good for the economy is a myth.

This is nonsense. Ilya gives a significant anecdote and you have offered no antidotes that would relegate this 9-0 trouncing of the NRA as the most enormous victory for freedom and implicit protection of minority rights -- because the majority doesn't need freedom to protect its rights in a populist state -- of the last century to the insignificance you allege.

Cartelization was monopolistic and anti-minority by its very definition. True, minorities could form coalitions to capture the process, but that only has the effect of making former leading players like Schechters in their market, into minorities.

It s autoritarians like Scalia who are as much responsible for the abdication of Schechter's import as are the bureaucratists like Breyer and Stephens.

and for those non-skeptics who cannot even suspend disbelief in the goodness of FDR long enough to think through the economic insanity posed by this particulary coporate statist thrust of the New Deal, there is little hope for reasoned discussion.

Shlaes gives FDR a fair amount credit for certain iniatives in her account. Although at least one reasonable inference to draw from her book is that FDR prolonged the depression, she concedes that one can't compare this to no depression or recession, as there is little possibility that other politicians who had any chance of supplanting FDR would have restrained from serious interferences in the economy. And she cites Hoover as the font of some of FDRs programs, where he simply relied on the semantic (not an unimportant one) of fealty to the Constitution.